Azbil (6845): FY2025 Results Summary — Operating Income Up 14.0% on Profitability Measures; 50 Yen Dividend and 20.0 Billion Yen Buyback Planned for FY2026

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

For FY2025 (the fiscal year ended March 31, 2026), Azbil Corporation reported consolidated orders received of 302.3 billion yen (down 0.8%), net sales of 298.9 billion yen (down 0.5%), operating income of 47.3 billion yen (up 14.0%), ordinary income of 48.7 billion yen (up 15.6%) and net income attributable to owners of parent of 38.5 billion yen (down 5.8%). In the BA and AA businesses, orders received, sales and segment profit all increased, but the LA business declined owing to the FY2024 transfer of overseas subsidiary Azbil Telstar (ATL); excluding the effect of the transfer, the company says both orders received and net sales effectively increased. For FY2026 the company will voluntarily adopt IFRS and plans revenue of 315.0 billion yen, business profit of 48.2 billion yen and profit attributable to owners of parent of 35.3 billion yen. The FY2025 annual dividend is to be raised to 32 yen per share, and for FY2026 the company plans an annual dividend of 50 yen per share (including a 12 yen 120th anniversary commemorative dividend) together with a share buyback of up to 20.0 billion yen.

Consolidated Results (Full-Year Actual)

Orders received were 302.3 billion yen, down 2.3 billion yen (0.8%) from 304.7 billion yen in FY2024. Orders rose for the BA business but fell significantly for the LA business because of the FY2024 transfer of equity interests in ATL (impact: a reduction of 15.5 billion yen). Net sales were 298.9 billion yen, down 1.4 billion yen (0.5%) from 300.3 billion yen; sales increased for both the BA and AA businesses, but the ATL transfer (impact: a reduction of 14.6 billion yen) caused a significant drop in the LA business. Net sales of 298.9 billion yen were 0.9 billion yen (0.3%) above the plan of 298.0 billion yen announced on October 30, 2025. Sales in Japan were 246.5 billion yen (up 3.9%) and overseas 52.4 billion yen (down 17.0%). Excluding Azbil Telstar’s results, orders received rose 13.1 billion yen (4.6%) from 289.1 billion yen and net sales rose 13.1 billion yen (4.6%) from 285.7 billion yen.

Gross profit increased 7.7 billion yen (5.9%) to 139.5 billion yen, with the gross margin rising 2.8pp to 46.7%. SG&A expenses rose 1.8 billion yen (2.1%) to 92.2 billion yen. Operating income increased 5.8 billion yen (14.0%) to 47.3 billion yen, exceeding the plan of 45.5 billion yen by 1.8 billion yen (4.0%), owing to profitability-strengthening measures including cost pass-through despite increases in personnel and other expenses; the operating margin rose 2.0pp to 15.8%. Ordinary income increased 6.5 billion yen (15.6%) to 48.7 billion yen, exceeding the plan of 45.5 billion yen by 3.2 billion yen (7.2%) thanks to the recording of foreign exchange gains. Income before income taxes was 50.7 billion yen (down 4.5%). Net income attributable to owners of parent decreased 2.3 billion yen (5.8%) to 38.5 billion yen, mainly because a gain on sale of equity interests in ATL (7.6 billion yen) had been recorded as extraordinary income in FY2024; it far exceeded the plan of 33.5 billion yen (by 5.0 billion yen, 15.1%), mainly due to the recording of gain on sale of investment securities. The company notes that the impact of foreign exchange rate fluctuations versus FY2024 was 0.3 billion yen for net sales and 0.0 billion yen for operating income.

Item (Billions of yen)	FY2024 (A)	FY2025 (B)	(B) – (A)	% Change	Plan (Oct. 30, 2025) (C)	(B) – (C)
Orders received	304.7	302.3	(2.3)	(0.8)	–	–
Net sales	300.3	298.9	(1.4)	(0.5)	298.0	0.9
Japan	237.2	246.5	9.3	3.9	–	–
Overseas	63.1	52.4	(10.7)	(17.0)	–	–
Gross profit	131.8	139.5	7.7	5.9	–	–
Margin (%)	43.9	46.7	2.8pp	–	–	–
SG&A	90.3	92.2	1.8	2.1	–	–
Operating income	41.4	47.3	5.8	14.0	45.5	1.8
Margin (%)	13.8	15.8	2.0pp	–	15.3	0.6pp
Ordinary income	42.1	48.7	6.5	15.6	45.5	3.2
Income before income taxes	53.1	50.7	(2.3)	(4.5)	–	–
Net income attributable to owners of parent	40.9	38.5	(2.3)	(5.8)	33.5	5.0
Margin (%)	13.6	12.9	(0.7)pp	–	11.2	1.7pp

On the balance sheet, total assets rose 17.1 billion yen to 332.2 billion yen as of March 31, 2026, due to increases in cash and deposits and in investment securities caused by a rise in the market value of shareholdings. Net assets increased 15.4 billion yen to 255.9 billion yen. ROE was 15.7% (17.9% in the previous year) and the shareholders’ equity ratio was 76.1% (75.3%). Net cash provided by operating activities was 38.0 billion yen (43.9 billion yen in FY2024), net cash used in investing activities was 6.4 billion yen due to ongoing capital investments to strengthen the production base, and free cash flow was 31.5 billion yen (45.9 billion yen). Capital investment was 7.9 billion yen and depreciation 7.0 billion yen.

Segment Results

Building Automation (BA): Orders received increased 10.1 billion yen (6.6%) to 163.7 billion yen, owing to the recording of large-scale projects in the fields for existing buildings and in the overseas business, in addition to robust market conditions. Sales increased 7.5 billion yen (5.1%) to 156.3 billion yen, exceeding the plan of 154.0 billion yen, thanks to steady growth in the fields for existing buildings and service and in the overseas business, despite a decline in the field for new buildings. Segment profit grew 4.5 billion yen (18.6%) to 28.9 billion yen, exceeding the plan of 27.0 billion yen, with the margin rising 2.1pp to 18.5%.

Advanced Automation (AA): Orders received were on a par with FY2024 at 106.2 billion yen (up 0.2%); while large advance orders made at the end of FY2024 in the overseas process automation (PA) market led to a fall, the domestic PA market remained robust and factory automation (FA) market orders grew from the second half. Sales rose 3.8 billion yen (3.6%) to 110.7 billion yen, slightly short of the plan of 111.0 billion yen. Segment profit grew 1.8 billion yen (11.3%) to 17.8 billion yen, achieving the plan of 17.5 billion yen, owing to higher sales, the product mix and measures to strengthen profitability; the margin rose 1.1pp to 16.1%.

Life Automation (LA): Orders received decreased 12.9 billion yen (27.6%) to 33.9 billion yen, sales decreased 13.2 billion yen (28.5%) to 33.3 billion yen, and segment profit decreased 0.5 billion yen (46.2%) to 0.6 billion yen, all as a result of the transfer of Azbil Telstar, whose equity interests were transferred in full on October 31, 2024. Excluding ATL, orders received rose 2.6 billion yen (8.4%) from 31.3 billion yen, sales rose 1.3 billion yen (4.1%) from 32.0 billion yen, and segment profit was 0.1 billion yen (15.6%) lower than 0.7 billion yen. The plan (sales 34.5 billion yen, segment profit 1.0 billion yen) was not achieved, with segment profit affected by soaring prices for parts/materials and higher personnel expenses.

Segment	Item (Billions of yen)	FY2024 (A)	FY2025 (B)	(B) – (A)	% Change	Plan (Nov. 5, 2025) (C)
BA	Orders received	153.6	163.7	10.1	6.6	–
BA	Sales	148.7	156.3	7.5	5.1	154.0
BA	Segment profit	24.3	28.9	4.5	18.6	27.0
BA	Margin (%)	16.4	18.5	2.1pp	–	17.5
AA	Orders received	105.9	106.2	0.2	0.2	–
AA	Sales	106.8	110.7	3.8	3.6	111.0
AA	Segment profit	15.9	17.8	1.8	11.3	17.5
AA	Margin (%)	15.0	16.1	1.1pp	–	15.8
LA	Orders received	46.8	33.9	(12.9)	(27.6)	–
LA	Sales	46.6	33.3	(13.2)	(28.5)	34.5
LA	Segment profit	1.1	0.6	(0.5)	(46.2)	1.0
LA	Margin (%)	2.5	1.9	(0.6)pp	–	2.9

Overseas sales decreased 17.0% to 52.4 billion yen, mainly due to the ATL transfer, and the overseas sales ratio was 17.5%. Excluding ATL, overseas sales rose 3.8 billion yen (8.0%) from 48.5 billion yen to 52.4 billion yen, with China at 26.0 billion yen (up 3.2%), Asia (ex-China) 15.7 billion yen (up 0.7%), North America 8.2 billion yen (up 50.0%), Europe 0.8 billion yen (up 11.9%) and Others 1.5 billion yen (up 7.9%). BA business sales increased mainly in Asia, and AA business sales increased significantly in North America. Average exchange rates for FY2025 were USD/JPY 150.67, EUR/JPY 174.64 and CNY/JPY 21.22.

FY2026 Forecast

Azbil will voluntarily adopt International Financial Reporting Standards (IFRS) from the first quarter of FY2026, and the FY2026 plan is presented on an IFRS basis, with FY2025 results restated to IFRS as preliminary, unaudited figures (revenue 298.9 billion yen, business profit 46.2 billion yen, profit attributable to owners of parent 36.4 billion yen). For FY2026 the company plans revenue of 315.0 billion yen (up 16.0 billion yen, 5.4%), business profit of 48.2 billion yen (up 1.9 billion yen, 4.3%) with a margin of 15.3%, and profit attributable to owners of parent of 35.3 billion yen (down 1.1 billion yen, 3.1%). The first-half plan is revenue of 139.5 billion yen, business profit of 17.3 billion yen and profit of 12.4 billion yen. The company states that, owing to the high degree of uncertainty regarding the Middle East situation (including the conflict involving the United States and Iran), the plan takes into account only those effects that can be confirmed at this time. Growth is expected primarily in the BA business, which has a large order backlog, while inflation is expected to raise parts/materials costs and personnel expenses; the company will implement measures to strengthen profitability, including cost pass-through, and harness DX to improve operational efficiency. Assumed exchange rates are USD/JPY 156 and CNY/JPY 22.2 (FY2025: USD/JPY 150, CNY/JPY 21.2).

Item (Billions of yen)	FY2025 Results (J-GAAP) (A)	FY2025 Results (IFRS, preliminary)	FY2026 H1 Plan (IFRS)	FY2026 H2 Plan (IFRS)	FY2026 Full Year Plan (IFRS) (B)	(B) – (A)	% Change
Revenue	298.9	298.9	139.5	175.5	315.0	16.0	5.4
Business profit	47.3	46.2	17.3	30.9	48.2	1.9	4.3
Margin (%)	15.8	15.5	12.4	12.4	15.3	(0.2)pp	–
Profit attributable to owners of parent	38.5	36.4	12.4	22.9	35.3	(1.1)	(3.1)
Margin (%)	12.9	12.2	8.9	13.0	11.2	(1.0)pp	–

By segment, BA revenue is planned at 166.0 billion yen (up 9.6 billion yen, 6.2%) with business profit of 30.0 billion yen (up 1.6 billion yen, 5.9%), reflecting robust market conditions and a large order backlog, with measures such as increasing margins at the point of order receipt and cost pass-through. AA revenue is planned at 115.0 billion yen (up 4.2 billion yen, 3.9%) on the FA market recovery, with business profit of 17.2 billion yen (down 0.1 billion yen, 1.1%), on a par with FY2025, owing to rising parts/materials costs, increased personnel expenses and the effect of the FY2025 product mix. LA revenue is planned at 35.3 billion yen (up 1.9 billion yen, 5.9%), primarily through growth in the Lifeline field, with business profit of 1.0 billion yen (up 0.4 billion yen, 99.9%) thanks to measures including price adjustments.

Segment	Item (Billions of yen)	FY2025 Results (J-GAAP)	FY2025 Results (IFRS, preliminary) (A)	FY2026 Full Year Plan (IFRS) (B)	(B) – (A)	% Change
BA	Revenue	156.3	156.3	166.0	9.6	6.2
BA	Business profit	28.9	28.3	30.0	1.6	5.9
BA	Margin (%)	18.5	18.1	18.1	(0.1)pp	–
AA	Revenue	110.7	110.7	115.0	4.2	3.9
AA	Business profit	17.8	17.3	17.2	(0.1)	(1.1)
AA	Margin (%)	16.1	15.7	15.0	(0.8)pp	–
LA	Revenue	33.3	33.3	35.3	1.9	5.9
LA	Business profit	0.6	0.5	1.0	0.4	99.9
LA	Margin (%)	1.9	1.5	2.8	1.3pp	–

Shareholder Returns

Azbil’s basic policy is to return profits to shareholders mainly by dividends, supplemented by flexible repurchase of shares, while maintaining a stable but rising dividend level and balancing shareholder returns, investment for growth and a sound financial base. In view of the strengthened profitability of its business foundation and efficient balance sheet management, the company will increase FY2025/FY2026 dividends and expand the share buyback program in FY2026. For FY2025, the year-end dividend is to be increased by 6 yen from the initial plan (May 2025) to 19 yen, making an annual dividend of 32 yen per share (+8 yen compared to FY2024), with a payout ratio of 42.2% and DOE of 6.7%, exceeding the medium-term plan target level of 6.0% ahead of schedule. The year-end dividend will be paid after approval at the Ordinary General Meeting of Shareholders on June 24, 2026.

For FY2026, the company plans to increase the ordinary dividend by 6 yen to 38 yen per share (interim 19 yen, year-end 19 yen), the 12th consecutive year of ordinary dividend increases, and to issue a 120th anniversary commemorative dividend of 12 yen per share at the time of the interim dividend, making a projected annual dividend of 50 yen per share (+18 yen compared to FY2025) and a planned total interim dividend of 31 yen. On this basis the payout ratio would be 72.1% (54.8% excluding the commemorative dividend) and DOE 10.7% (8.0% excluding the commemorative dividend). In addition, the company plans to repurchase up to 32.00 million shares (6.2% of common shares issued, excluding treasury shares) for up to 20.0 billion yen, through market transactions on the Tokyo Stock Exchange from May 14, 2026 to October 30, 2026. Given the uncertainty surrounding the business environment, the repurchased shares will be held as treasury shares for the time being rather than cancelled immediately. The company also notes that FY2025 azbil Group ROIC (trial calculation) was 11.5% applying J-GAAP and 11.3% applying IFRS, against a WACC of 7.6%.

Dividend per share (Yen)	FY2025 Initial Plan (May 13, 2025)	FY2025 Revised Plan (May 13, 2026)	FY2026 Plan (May 13, 2026)
Interim	13.0	13.0	31.0
Year-end	13.0	19.0	19.0
Annual	26.0	32.0	50.0
of which ordinary dividend (annual)	26.0	32.0	38.0
of which 120th anniversary commemorative dividend	–	–	12.0
Payout ratio	42.6%	42.2%	72.1% (54.8% excluding commemorative dividend)
Dividend on equity (DOE)	5.5%	6.7%	10.7% (8.0% excluding commemorative dividend)

Medium-Term Plan Progress

Under the medium-term plan (FY2025–FY2027), whose key theme is Evolution and Co-creation, FY2025 results exceeded the initial plan (revenue 297.0 billion yen, business profit 43.0 billion yen, margin 14.5%, ROE 13.1%), with FY2025 results on an IFRS basis of revenue 298.9 billion yen (overseas sales 52.4 billion yen), business profit 46.2 billion yen, a margin of 15.5% and ROE of 15.4%. The FY2026 plan (IFRS basis) is revenue of 315.0 billion yen (overseas 56.5 billion yen), business profit of 48.2 billion yen, a margin of 15.3% and ROE of 15.0%. The FY2027 targets formulated in May 2025 remain unchanged at revenue of 340.0 billion yen (overseas 62.0 billion yen), business profit of 51.0 billion yen, a margin of 15.0% and ROE of 14%; the company states that a review will be considered once the current uncertain conditions become more foreseeable, also taking progress under the plan into account. Long-term targets for FY2030 are revenue of 420.0 billion yen (overseas 100.0 billion yen), business profit of 65.0 billion yen, a margin of 15.5% and ROE of 15%. The company is focusing investment on human capital, product competitiveness and DX promotion, with planned three-year cumulative increases of +32.0 bil. yen in total personnel expenses, +9.0 bil. yen in R&D and other expenses and +5.0 bil. yen in DX (IT) investment. In FY2026, the 120th anniversary of the company, Azbil will adopt new branding and has defined and announced the azbil Group’s Purpose and Vision.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.